Transcript Econ212-Pres

Russia
(Compared with China)
Group Members
Aaron Sakulich
Ryan Schultz
Craig Schroeder
General Facts
Russia
China
Central Asia
Capital
Eastern Europe,
Northern Asia
Moscow
Population
143 Million
1.3 Billion
Currency
Russian Ruble
Chinese Yuan
Location
Beijing
Russia: Geography
China: Geography
Economic Comparison
Russia
China
Growth Rate
7.3%
9.1%
Unemployment
8.5%
10.1%
Inflation Rate
13.7%
1.2%
Per Capita Income
$8,900
$5,000
$59 Billion
$39 Billion
Trade Bal. Ratio
2.17
16.14
GDP Production
$1.282 Trillion
$6.14 Trillion
$10 Billion
$319 Billion
153.5 Billion
197.8 Billion
Debt Ratio
138.2
20.17
Deficit Ratio
32.10
30.1
Trade Balance
Deficit
Debt
Labor Composition
Russia
China
12%
28%
23%
50%
65%
22%
Agriculture
Industry
Services
Events in Russia
 Yukos
is Russia’s largest oil
exporter
 Putin (Russian Government)
targeted Yukos
 Believed to be a move to destroy
its CEO, Mikhail Khodorkovsky.
What Happened
Targeted by Russian Government
 Charged $27.5 billion in “back taxes”
 Important assets auctioned off at low
prices indirectly to the government

–
–
Sold Yuganskneftegaz
Produced 60 percent of Yukos' oil
Current Status

Filed Bankruptcy in Russia
–
–

Filed Bankruptcy in Houston, Texas
–

Tried to prevent sale of assets
Not protected by the Russian Courts
Judge dismissed the case
Yukos sues for over $20 billion in
violations of bankruptcy stay
Economic Warnings

U.N. economists warned Russia to watch
their pursuit of this issue.
–

They say it will drive away foreign investment and
hurt the country’s economy.
When a country’s property rights can easily
be challenged by the government,
international investors react very badly.
Economic Warnings



Russia’s economy is very vulnerable
because it relies heavily on gas and oil.
The Yukos affair is not going to encourage an
internationally competitive industry.
Until the legal outcome of the Yukos affair is
announced, investors may be apprehensive.
Symptoms of Problems



Yukos made up 1/5 of the countries main
RTS stock index by capitalization
In recent months the RTS has lost about 1/3
of its value.
Because of the affair many are scared to
trust banks, 10 percent of depositors of each
credit organization declined banking
services.
Economic Outlook

GDP
–
–

7.3% higher in the first 5 months of 2004
compared to 2003
Expected growth to hit 10% in 2006
Domestic consumption is rising steadily
References
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CIA World Factbook – China http://www.cia.gov/cia/publications/factbook/
CIA World Factbook – Russia http://www.cia.gov/cia/publications/factbook/
Countrywatch – China http://www.countrywatch.com/
Countrywatch – Russia http://www.countrywatch.com/
Herald Tribune. http://www.iht.com/bin/pring.php?file=528051.html
Putin.ru. http://putinru.com/new/item/26633.html
Access News. “UN Warns Yukos Affair Could Hurt Russian Economy.”
http://www.axcessnews.com/business_072204.shtml
Mosnews.com. “BP Chief Calls Oil Company’s Experience in Russia ‘Positive’”
http://www.mosnews.com/money/2005/02/24/bppositive.shtml
The Mercury News, “Judge mulls Yukos bankruptcy dismissal.”
http://www.mercurynews.com/mld/mercurynews/business/10981740.htm?1c
Yukos homepage. http://www.yukos.com/
New Times. “Will back taxes ruin Yukos?”
http://www.newtimes.ru/eng/detail.asp?art_id=1206